IFA Centre IFA
Choweree House, 21 Boutport Street, Barnstaple, Devon EX31 1RP | (Tel) 01271 344300 | info@miltonpj.net
Founded in 1985, Philip J Milton & Company was incorporated in 1996 as a public limited company (Plc) with an authorised share capital of £1 Million.

Philip Milton's Latest Comments: 1 August 2017

Dear Friend

GOLD
So London stores £250trillion of the world’s gold in its vaults – 596,000 bars and weighing 7,500 tonnes. This is all owned by different entities and as one sells some and another buys some, the label on the front changes. Even some of our clients hold some of this as we have a little gold as a safe asset within client Portfolios – the currency of last resort. The Bank of England looks after 5,100 tonnes of this total. It is estimated that around the world, above the ground there are 187,100 tonnes of gold though this does include jewellery, personal stores and coins as well. Around £14billion of gold is traded every day. In silver, the figures stored are much smaller – 32,000 tonnes stored in London worth £14.5billion.

SPOT THE DOG
The latest annual funds’ assessment notes the funds which have achieved the accolade of having the most funds in the bottom performing categories for the last year. Top of the pile (well, bottom) was Aberdeen Asset Management – a group for which I have a great deal of respect generally though some of its specialist sectors (emerging markets and the Far East) have hurt badly and second was St James’s Place. The problem is that the funds these giant groups manage are huge so the number of people and the number of pounds affected are significant. This means that many, many people will have suffered from this under-performance. What is curious, if that is not the wrong word, about St James’s Place is that it appoints external managers to manage its funds so what has gone so very wrong? Of course, the cynic could say that the extra layers of costs suffered by investors with St James’s Place are coming home to roost but the survey would not include many of the charges which their clients suffer as separate agreements. Readers will know anyway that we don’t commend St James’s Place as there are superior services with wholly independent ranges of investments available at lower cost and greater transparency. In theory it doesn’t make any difference to us – we can use anybody’s product as we are staunchly independent.

BIG TOBACCO
Over the last twenty years, one sure-fire sector in which to invest has been tobacco. We haven’t but we have struggled with other things to keep-up regardless but tobacco’s time in the sun (from a very low base) may be numbered. America is looking at reducing the nicotine content of cigarettes so making them less addictive. Big tobacco shares were very worried last week. If you are a passive, index-linked-tracker investor, you would have been affected too and poor Neil Woodford still has a chunk in his Income funds so finishing-off a torrid few weeks for him. He had sold his BAT holding but still holds Imperial Brands – now down 25% from its high a few months ago. Unfortunately many other popular ‘Income’ funds will also have big doses of tobacco companies’ shares within them, so watch-out. We were unaffected, effectively, as we have none and haven’t liked them for a long time – or should I also say, we have favoured other things with better prospects, regardless.

What is interesting with these giant companies, so many of the same types of investment institutions hold them for all the same reasons that when they do have a wobble and the sentiment changes, who are the buyers of their holdings at the same ‘big’ prices? It is one of the reasons we do not generally hold very big managed funds – there is no way you can be deft-footed with a £100billion fund in our view but with just a few hundreds of millions that is one advantage you possess. Think about it too – if the individual investors and their advisers stop subscribing and start to demand their money back, these funds have to start disposing of big chunks of exactly the same stocks which they have all been holding so down goes the spiral again. It’s lovely on the way up but on the way down the other side… Contrarian investors (like ourselves, with a value bent) don’t tend to have all the same ‘popular’ stocks, though of course we do if we favour them regardless – it does not mean being contrary just for the sake of it!

For ethical reasons, we remain concerned with the tobacco industry spreading its impact to the developing world and addicting millions there as the developed world’s demand is dropping. It is the developing world which can least afford the increased medical costs from tobacco related illnesses and disease; maybe some super-tax will be imposed locally upon the tobacco giants to help compensate? ‘Ignoring’ the ethical arguments, which are no different from many others, another reason for not investing in them is at some point the financial implications will catch-up.

NEGLIGENCE COMPLAINTS
Occasionally we come across client situations whereby there appears to have been bad or negligent advice. We were very sorry to lose-out on one where the individuals had a sure-fire claim against a mortgage company for fraudulent advice where they ended-up losing well over £100,000 but sadly the clients did not complain in time and the firm would not accept a claim outside the statutory time limits. We tried really hard to demonstrate time validity but even the Ombudsman would not accept it.

However, we have had some recent success. One client who came to us following a defunct ‘safe’ investment elsewhere has had an offer for the best part of £50,000 following a successful Ombudsman claim, despite the firm’s attempts to insist it was not responsible. This centred upon an advised investment in a spurious investment scheme run through Connaught. If you had any, contact us immediately as it is likely to have been mis-sold to you.

Then this week, another client has had an award of £24,000 following a complaint against the sale of an Offshore Bond to keep their cash deposits – and no ongoing advice or care about making sure they used their valuable tax allowances. Again, initially the firm denied any culpability but the cynic in us realised that the salesman was really only interested in the very large commission he’d earn if he sold the bonds to them then disappeared, rather than doing a proper job and suggesting other investments and regularly using personal tax allowances and things like ISAs each year.

We never want to discover that things have been done badly but sometimes they are and whilst new rules about commissions and fees will dissuade inappropriate advice, it will still happen. As a regulated claims management company ourselves as well, we are able to investigate and pursue negligence claims in such instances. If you are not sure if something you have been recommended to have was right for you, then we are pleased to have an informal look for you without cost or obligation. Remember, this is not about investments which go down in value as well as up – this is negligence and inappropriate behaviour.

ARE YOU PAYING THE TAX YOU SHOULD BE?
A fascinating insight into how HM Revenue and Customs (HMRC) is catching perpetrators of tax fraud has been published. Tax evaders watch-out - there are very few places you can hide these days! Not only is HMRC checking income it is watching expenditure too as one relates to the other... it even pays money out to people to reporting evaders, having paid-out £460,000 in the year to 31 March 2016. Acrimonious relationship breakdowns often yield sources subject to tax which HMRC did not know about previously. However, it does put paid to oft-repeated ways of raising revenue for the Country by hoping there are tens of billions of low-hanging fruit from tax evasion: they don't exist. Aggressive avoidance (e.g. some multinationals and mischievous trusts) is also being targeted already.

See FT: Ten ways HMRC can tell if you’re a tax cheat
‘You’ could be caught on Social Media, via your credit card bills, trading on Amazon or Ebay, property records at The Land Registry, legacies in Wills, advertising an unregistered business, your accounts being lower than your peers in the same trade, cash deals to avoid VAT and so it might go on. Well, after-all, you should be paying what you are due to pay so that the State receives the money to which it is entitled and all the rest of us is not paying more because you are not paying your dues! There are also some nasty penalties whether your illicit behaviour actually hid tax or not - £25,000 fines to start. If you also cheated the Taxman purposefully of more than £25,000, your name and details are published by HMRC. Here’s the latest list!

HMRC: Current list of deliberate tax defaulters
Many show ‘former addresses’ meaning basically that their sins have not only been discovered but the consequence has meant they have lost their business – a heavy price to pay for the fraud perpetrated.

RISK WARNING
Stock market investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.

To remind you, why do I send out occasional emails? Because everyone can save money. We have no connection with any companies mentioned and you have to make your own contacts and satisfy your own enquiries. What is in it for us? If we can prove that we are knowledgeable and that our service and advice have good value, then you might contact us for professional financial planning and investment help. You don’t have to do that though and there’s no charge for emails. If simply they save you money, then accept them with our compliments! However, you’ll know where we are!

If you have any queries of any form or indeed any subjects you think I could include, please contact me. I also refer you to our website www.miltonpj.net. We celebrated our thirtieth anniversary in 2015 and have been publishing a well-respected independent column in the local Paper for most of that time and free client newsletters as well.

Do not forget however the usual caveats – this is not ‘advice’ and you are encouraged to seek that before embarking upon any financial route involving investments, etc.

My best wishes

Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB
Chartered Wealth Manager
Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers

The Financial Conduct Authority does not regulate some areas mentioned on our web site including: Buy to Let Mortgages, Claims Management Activity, Taxation & Accountancy, Probate Administration and Will Writing.

Financial services complaints we cannot settle may be referred to the Financial Ombudsman Service; www.financial-ombudsman.org.uk 0800 023 4 567. Details of our complaints procedure are available via the documents tab above.

Risk Warning - Stockmarket investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.

Philip J Milton & Company Plc is authorised and regulated by the Financial Conduct Authority.
Philip J Milton & Company Plc is entered on the FCA register (http://www.fca.org.uk/register) under reference: 181768.
# Registered Office: Choweree House, 21 Boutport Street, Barnstaple, Devon EX31 1RP
Registered and Incorporated in England number 3233275 | VAT number 682 2544 28
A list of the Directors is available from the registered office

 

Copyright © Philip J Milton & Company Plc - 2016